Transport Management: Bus Falls from Skyway Part 2 . . . How We Pay Truck Drivers & Accidents on the Road

Also similar to the previous post concerning Bus Falls from the Skyway, I want to bring up the situation of Truck Drivers in Manila which should be of concern to for how Logistic managers contract Trucking (or Cargo hauling) services in the Philippines:

1.  Truck drivers (working for Third-party trucking providers or haulers )are usually paid by the trip.

courtesy of AP/Patrick Reddy

2.  Provincial trips are paid a higher per trip rate and may or may not include an allowance for meals depending on umber of days to complete the delivery.

3.  Company-hired drivers are paid by the day or month with overtime pay in excess of 8 hours.  (For 3rd-party drivers, there is no such thing as fixed hours and OT pay.  Benefits are optional)

4.  Most manufacturers use 3rd-party trucking providers (as use of company-hired drivers is more expensive due to higher government-mandated wage rates & benefits as well as OT pay which outside truckers do not have to pay)

5.  Because Logistic managers of manufacturers pay haulers by the case or by the trip, the hauler also pays his driver by the trip.

6.  The hauler cannot pay monthly wages as there is no guarantee that the client-manufacturer or company will give him a daily trip.

7.  During lean months, the hauler will have to contend with idle trucks or trucks that deliver less-than-full truckload meaning his revenue may be at a loss if the number of cases paid for is less than his fuel and wages.

8.  The driver has to complete each trip in one day so that he can earn again the next day's trip.  If his trip takes more than 2 days, the hauler will only pay him once.

9.  Tendency then is for the driver to rush to finish his delivery.

10.  Also, in Manila we observe truck ban periods (no trucks on the road) from 5am to 7am and from 5pm to 9pm.  Hence, a driver that finishes his load has to wait for 9pm before he can go home i.e. maybe 10 to 11pm but has to be on the road again at 2 to 3am to avoid the truck ban at 5am.  Hence, he gets his sleep whenever the truck is waiting to be loaded or unloaded.

11. Drug usage (to keep awake) among drivers is always a problem for the hauler and Logistics manager.


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Which is Better, a Company-hired Employee or a Contract-based (Contractual) Worker?

Will I Regret Hiring You?  (courtesy of doitsolowithnolo.com)

When I was the Plant Administrative Services Manager of an Integrated Textile Mill south of Manila, I was in charge of a 1,200-man workforce of which about 300 were contract-based (contractual) workers and the rest were unionized regular (company-hired) employees. There lies the dilemna faced by many charged with managing a work force, to wit:

1.  In the Philippines, a contract-based or contractual worker must be regularized if his/her work tenure reaches 6 months of continuous work.  In almost all cases, contractual workers are let-go by the time their service reaches 5 months.

2.  In a skill-based industry such as a textile mill, our expatriate-technicians used to say it is a waste because the first month or two, the contract worker would just be learning the task \& hence exhibit high quality defects and just as she goes over the learning curve, she is laid-off.

3.  The unions have always condemned the use of contractual workers as this was a means to evade unionism (contractuals are not members of the union).

Company-hired or Contractual?  (courtesy of learnthat.com)

4.  When I asked our then Spinning mill manager where the bulk of the contractual workers were, it was mentioned that contractual workers are more conscientious with their work as they know that they can be let-go anytime if their performance do not meet company standards whereas regular workers tend to take their job for granted as they know they cannot just be removed from their jobs. (In my plant, we have 3 unions of which one of the unions calls themselves the February 21 Movement, a militant group of the Federation of Free Workers in the Philippines)

Of course, not all regularized employees are like that (I believe most regular employees care for their jobs especially as jobs are hard to come by) but one cannot help to play it safe and just bite the bullet (learning curve ills) & stick to contractuals.

Reach truck operator putaway of goods (courtesy of mhedcm.blogspot.com)

Take for example a Reach Truck or Forklift operator for a Logistic Distribution Center:

1.  The Reach Truck could cost upwards of P1.4 Million (USD 28,000);

Reach truck operator in a Warehouse

2.  Because operating a specialized equipment like a Reach Truck requires skills & years of experience, it is very difficult to hire good operators;

3.  A Reach truck operator would tend to know where all the SKUs are located in a Warehouse Racking System because of the day-in/day-out putaway/picking activities that he does & that has a very distinct bearing in the speed of storage or issuance of products;

4.  So, do I let-go of him after 5 months or not?

5.  Or do I just outsource the function and let the manpower agency worry about what to do with the reach truck operator if he turns out to be a "Bad Egg"?



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Employee Efficiency--- The Hardest Thing to Prove to the Department of Labor!

During my stint as Plant Administrative Services Manager for the Robina Textile Mills, one of the companies under the Gokongwei Group of Companies, I was responsible for Labor Relations at the Plant level, to wit:

1.  The Factory complex is on an 18-hectare property and there were 2 spinning mills as well as an Integrated Textile Mills.  From cotton fiber imported from around the world, the Factory Complex produces spun and knitting yarn as well as fabric.  (We were one of only two suppliers of denim to Levi's Philippines);

2.  The Complex had 1,200 workers divided into 3 unions (one of which is considered militant);

courtesy of listverse.com

3.  The managers running the different Production departments were like a mini-United Nations as we has expatriates and technicians from Japan, Taiwan, then East Germany, West Germany, British and even French and naturally, work ethics in the Industrialized countries are so much different from the Filipino mentality and there were occasions that I had to mediate between the Expats and the Union shop stewards.

Since any work stoppage no matter how short is very costly for such a large facility, my orders were to prevent any disruption in operations and hence, I have had to interface with our Industrial Relations Manager based in Manila quite regularly.  One of the contentious issues, at least for the Philippine setting, is Efficiency or rather the lack of efficiency as grounds for terminating an employee.  And this is the sad part during my discussions with Industrial Relations Department at the time:

1.  Inefficiency of an employee is the hardest to prove;

2.  To prove Number 1, the Company should have done the following before terminating any worker for that reason:

      a.  The Work Standards must be posted throughout the Plant;

     b.  The Work Standards must have been explained to the worker during Day 1 of Hire;

     c.  There must be a record of worker evaluation every month and the results discussed with the worker;

     d.  Sufficient time and guidance must have been given to correct any deficiency.

     e.  Proof there was no bias on the part of the evaluating part (supervisor, foreman etc)

3.  Never terminate an employee during an Election Year as the Department of Labor was very political in nature;

4.  The local government would probable side with the worker as they are "Votes".


In a sense, it is because of the above why most companies prefer to hire contractuals and to let go before the 6-months probationary period of the new hire expires.

Sorry for the Company's Human Resources or Personnel department and the line managers who failed to do their homework.

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